Summary
The Washington Supreme Court held that the six-year statute of limitations for an action on an account receivable incurred in the ordinary course of business applies to an attorney’s claim for unpaid hourly legal fees, even without a written fee agreement. The court reversed the Court of Appeals and reinstated the trial court’s ruling, while a dissent argued that the statute should be limited to open accounts.
Topics
Practice areas
Questions Presented
- Whether the term account receivable in RCW 4.16.040(2) means an amount due a business from a customer who has received services, or instead refers only to an open account.
- Whether the six-year statute of limitations for an action upon an account receivable incurred in the ordinary course of business applies to an attorney's action to collect hourly legal fees under an oral fee arrangement.
Holdings
- The plain meaning of account receivable as used in RCW 4.16.040(2) is an amount due a business on account from a customer who has bought merchandise or received services.
- The six-year limitation in RCW 4.16.040(2), rather than the three-year limitation for oral contracts in RCW 4.16.080(3), applies to Tingey's action to collect the balance owed by the Haisches for hourly legal services performed without a written fee agreement.
Key quotations
“We hold that the plain meaning of "account receivable" as used in RCW 4.16.040(2) is an amount due a business on account from a customer who has bought merchandise or received services.” (1022)
“The plain meaning of "account receivable" in RCW 4.16.040(2) is an amount due a business on account from a customer who has bought merchandise or received services.” (1026)
Factual background
In 1994, David Tingey represented Lloyd and Lucy Haisch in a Grant County Superior Court lawsuit without a written fee agreement. Tingey regularly invoiced the Haisches for legal services performed on an hourly basis, and they paid the invoices through June 1994; Tingey completed the representation in December 1994. More than three years later, Tingey initiated a collection action seeking more than $20,000 for unpaid legal services and interest.
Procedural history
Tingey represented the Haisches and later brought a collection action for unpaid attorney fees. The trial court denied the Haisches' motion to dismiss as time-barred and granted Tingey partial summary judgment, ruling that the six-year account-receivable limitation applied; Tingey then prevailed at a bench trial. The Court of Appeals reversed the summary judgment ruling, concluding that account receivable referred to an open account. The Supreme Court granted Tingey's petition for review, reversed the Court of Appeals, and reinstated the trial court's summary judgment ruling.
Remand instructions
The Court of Appeals was reversed and the trial court's summary judgment ruling applying the six-year limitation was reinstated.